Peapod grabs $73 million investment
The cash-strapped online grocer is being rescued by a $73 million investment from international food provider Royal Ahold, the companies announce today.
Under terms of the agreement, Ahold will buy 51 percent of a newly issued series of convertible preferred Peapod stock for $3.75 per share, Ahold said in a statement. Chicago-based Peapod will continue to operate as a standalone company.
Last month, reports surfaced that Peapod was shopping itself around after four firms canceled a $120 million investment, citing the resignation of the company's chief executive, Bill Malloy.
In the company's annual report, Peapod's independent auditors, KPMG, said recurring losses from operations had drained its available cash reserves.
Peapod has struggled to stay afloat since news surfaced that Malloy was suffering from physical and mental exhaustion. Peapod executives have sought an investor or buyer to prevent the company from going out of business.
The company has even considered trying to recover a $2.5 million loan it made to Malloy when he was hired.